What’s Driving The Titagarh Rail Rally? Stock Up By 224% In 1 Year

Titagarh Rail Rally

Curious about how Titagarh Rail Systems’ stock shot up by a staggering 224% in just one year? This fortune of Indian rolling stock manufacturer is not magic—it’s a result of a combination of factors! What are those? You may wonder. Just go through this write-up and you’ll find out the reasons behind the Titagarh Rail rally!

Titagarh Rail Rally

(A) Reasons: What’s driving the Titagarh Rail Rally?

So, you know Titagarh Rail Systems has been on fire lately, and here’s why it’s catching everyone’s attention-

(A.1) Strong Financial Performance

Titagarh Rail Systems reported impressive financial results… Their latest financial report showed a jaw-dropping 64% jump in profit for the March quarter alone. From Rs.48.20 crore last year, they’ve surged to Rs.79 crore in net profit! And that’s not all—their revenue soared too, up 8% to Rs.1,052.4 crore from Rs.974.20 crore last year. 

For the entire FY24, their revenue skyrocketed by an astonishing 38.59%, hitting Rs.3,853 crore, while their net profit shot up an incredible 126% to Rs.286 crore. It’s like hitting the jackpot! Isn’t it?

(A.2) Robust Order Book

But wait, there are more facts brewing. Their order book is bursting at the seams, totaling a whopping Rs.28,100 crore by the end of the fiscal year. Just think about it—Rs.14,800 crore of that will be fulfilled over the next three to five years. Plus, they clinched a major Rs.1,910 crore deal to supply over 4,000 BOSM Wagons to the Indian Railways. Indeed they landed on big contracts!

(A.3) Increased Production and Capacity Utilization

Guess what? Their production lines are running at full throttle. They churned out 1,089 wagons in March 2024, 2,700 in Q4FY24, and a whopping 8,400 for the entire FY24. They’re aiming to hit 950–1,000 wagons per month in FY25, with plans to stabilize at 1,000 wagons monthly. No wonder they’re gearing up for a marathon!

(A.4) Benefiting from Surging Railway Capex

Indian government investing on Titagarh rail

Titagarh Rail Systems is capitalizing on the increased capital expenditure in the railway sector by the Indian government. This has led to significant order inflows and a positive earnings outlook, driving investor confidence and stock demand.

(A.5) Positive Broker Recommendations

Several brokerages have given favorable recommendations for Titagarh Rail Systems. Nuvama raised its target price to Rs.1,475, citing the company’s strong operating performance and potential for further growth. Morgan Stanley initiated an ‘overweight’ rating with a target price of Rs.1,285, highlighting the company’s role as a major beneficiary of the Indian railway revival and its strong growth prospects.

(A.6) Expansion into the Passenger Coach Segment

The passenger coach business is emerging as a new growth driver for Titagarh Rail Systems. The company is set to commence work on metro rail coach orders for Bengaluru, Ahmedabad, and Surat, expecting to produce 15–20 cars per month by the end of FY25. This segment’s margins are also anticipated to improve significantly.

(A.7) Strategic Partnerships & Backward Integration

Titagarh Rail Systems is involved in strategic partnerships and backward integration initiatives. The production of the propulsion system in partnership with ABB and the manufacture of forged wheel sets through a joint venture with Ramkrishna Forgings are expected to enhance profitability and operational efficiency.

These factors combined have significantly boosted investor confidence, leading to a remarkable 224% increase in Titagarh Rail Systems’ stock over the past year.

Note: Do you know, recently the Jupiter Wagons stock jumped up to 400% in the last one year? If not, then read the article- What’s Driving The Jupiter Wagons Rally? Railway Stock Up 400% In 1 Year for detailed information for detailed information.

(B) What should investors do with Titagarh Rail Stocks?

Should the investors buy Titagarh stocks

Are you one of those investors who are wondering whether to buy, sell, or hold onto your Titagarh Rail stocks? If yes, then let me give you a brief overview of it-

(B.1) Buy: Jump on the Bandwagon

If you’re thinking about buying, you might be onto something. Titagarh Rail Systems has shown impressive growth, with its stock surging by 224% in a year. The company has a strong order book, and a solid financial performance, and is expanding into new areas like passenger coaches. Plus, with the Indian government investing heavily in railways, there’s a good chance this upward trend could continue. If you believe in the long-term growth of the railway sector and Titagarh’s role in it, buying could be a smart move.

(B.2) Sell: Cash in on the Gains

On the flip side, if you’ve already made significant profits from holding Titagarh Rail stocks, selling might not be a bad idea either. The stock has already climbed a lot, and some analysts believe that it might take a break before climbing higher. If you’re looking to secure your gains and avoid potential short-term dips, selling could be the way to go. After all, there’s no harm in taking profits off the table.

(B.3) Hold: Wait and Watch

If you’re in it for the long haul and believe in the company’s future prospects, holding onto your shares could be the best strategy. Titagarh Rail Systems is involved in several promising projects, and the railway sector’s growth potential is huge. By holding, you can ride out any short-term volatility and potentially benefit from future gains as the company executes its large order book and expands further.

Ultimately, the decision to buy, sell, or hold depends on your investment goals and risk tolerance. If you’re looking for growth and believe in the company’s future, buying or holding could pay off. If you prefer to lock in profits now, selling might be your best bet. 

Whatever you choose, make sure it aligns with your financial strategy and comfort level. By the way, what are your thoughts on this? Please share it in the comment section! Thanks for reading 🙂

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Published By: Supti Nandi
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